That, combined with frustration over seven years of falling purchasing power, has spawned political splinter parties on both the far left and far right that challenge mainstream politicians, especially in Europe. Each issue of our monthly INSIGHT newsletter includes an extensive overview of the economy...exhaustive investigations of key economic indicators and how they affect your investment portfolio...detailed examinations of emerging business and financial trends that could spell opportunity or danger to you and your investments...our investment themes...a wrap-up of recent economic data...and Gary Shilling’s back-page Commentary on matters great and small. Wednesday, May 6, 2020 Gary Shillings on big governments getting bigger Gary Shillings talks about US Government policies and what can be done to improve the US economy and encourage people to work. Dr. Shilling is well known for his forecasting record. The postwar babies are moving into retirement ages after lifetimes of excessive spending and deficient saving. Gary’s July INSIGHT publication (subscription only) “Underfunded Entitlements” illuminates on key macro trends unfolding. He is also the author of the monthly newsletter INSIGHT, and the book “The Age of Deleveraging”. Stream 2020-11-01 Retirement Lifestyle Advocates Radio w/ Dr. A. Gary Shilling by RLA from desktop or your mobile device Dr. A. Gary Shilling is an American financial analyst and commentator who appears on a regular basis in publications such as Forbes magazine, The New York Times, and The Wall Street Journal. 2020-11-01 EXPERT INTERVIEW – DR. A. GARY SHILLING. The U.S. economy continues to slip, substantiating our forecast that a recession may already be underway. But stock market investors continue to be overly euphoric. America may be entering peacetime when deflation normally reigns. Shilling and Harrison also discuss his investment ideas that arise from this forecast: cautiously short equities, short dollar, and long treasuries. So retail sales fell in December as well as January and February. Consumer spending alone is holding back a full-blown recession, but its growth is slipping and should continue. Age of Deleveraging have proved correct. The U.S. and, indeed, global economy is sliding into renewed pandemic-led recession, but until recently, equities leaped. The S&P 500 could go down 30% to 40% from here as the great depth and length of the recession hits home, writes Gary Shilling. Despite China's robust mercantile policies, Xi is pushing globalization to counter Trump's robust protectionism. Most successful investments are based on long-term themes, not knee-jerk reactions to short-term developments. The Fed, among others, is surprised that real wages in the U.S. remain flat. Deflation is spreading worldwide and will probably extend beyond commodities to prices in general, much to the concern of central banks. Wednesday, May 6, 2020 Gary Shillings on big governments getting bigger Gary Shillings talks about US Government policies and what can be done to improve the US economy and encourage people to work. Economic growth in China in the next year or so seems destined to weaken. Falling U.S. retail sales in September as well as sliding wages and employment growth spell weakness in consumer spending growth and foretell recession. He is president of A. Gary Shilling & Co., Inc., editor of A. Gary Shilling's Insight, and member of The Nihon Keizai Shimbun Board of Economists. Tough economic times as well as low asset levels and high debts encourage saving as does spreading and intensifying deflation. Last month, investors began to realize that the Fed, which has supported the uninterrupted five-year bull market in stocks with QE, is no longer pumping out money. Since we cannot anticipate all the requisites of each individual viewer, there is no consideration given for the specific investment needs, objectives or tolerances of any of the viewers. The recent failure of OPEC to freeze oil output and plans by Saudi Arabia to diversify from petroleum confirm that the OPEC cartel is fading fast. Unless the Fed gets much more aggressive—and it may—it will take several years of credit-tightening to precipitate a business downturn, but a whole lot of factors have increased the economy’s vulnerability to a financial shock. Viewers should consult their own advisors, including tax advisors, before making any investment decision. Thirty-year Treasury bonds have fulfilled our "bond rally of a lifetime" forecast in 1981 with the yield falling from 14.6% to 1.9%—even below our 2% target. With slow economic growth persisting throughout the developed world, central bank actions remain the focus of investors. Chinese leaders will no doubt contain domestic problems to preserve their own credibility. In the first quarter, falling Treasury bond yields were a much better forecaster of economic woes than stocks and still portend a very deep "L" recession that stretches into 2021. He is also the author of the monthly newsletter INSIGHT, and the book “The Age of Deleveraging”. The Age of Deleveraging persists—and with it, slow global growth despite massive fiscal and monetary stimuli. Dr. Shilling is the president of A. Gary Shilling & Co., the editor of A. Gary Shilling's Insight and a long-time Forbes magazine columnist. Still, many believed China was generating independent growth and only shifted their perceptions to reality when Chinese stocks tanked and she devalued. China’s earlier growth model—importing raw materials and equipment to produce exports—no longer works with slow economic growth in Europe and North America, the ultimate buyers of most of those exports. “Many participants expressed the view that, especially in an environment of muted inflation pressures, the committee could afford to be patient about further policy firming.” So said the minutes from the Federal Reserve’s December 18-19 policy meeting. Many forecasters believe slow global growth will last indefinitely and that the world has entered a state of what they call “secular stagnation.”   They think developing economies are reaching the limits of easy growth based on emulating Western technology while advanced countries are increasingly oriented toward services, which often have less scope for productivity gains than goods. Still, the fallout from the this shift in perceptions on global stock markets, developing countries and commodities could be a shock adequate to precipitate global recession. So businesses have turned to cost-cutting and productivity-enhancement, which spiked profit margins but now appear to be exhausted. The information contained on this website is the property of A. Gary Shilling & Co., Inc. and we provide it for information and educational purposes only. But globalization is restraining wages and most new jobs aren't in high-paying manufacturing but in low-paying sectors like retail, health care and leisure and hospitality. Despite complaints by realtors and prospective buyers that there are far too few affordable houses on the market, supply and demand factors indicate that the current situation is not wildly out of balance. Since then, zero-coupon Treasury bonds have outperformed the S&P 500 by 7 times. Instead, the risks there are financial. Commodity prices, led by oil, are plummeting. Big banks resisted and pointed to their rebuilt capital, but regulators are responding with restraints that bereave them of proprietary trading and other lucrative activities and push them towards spread lending and other traditional commercial banking businesses. The end of fixed commission rates in 1975 and the cheapness of electronic transfer of securities and funds have collapsed financial industry fees. Dr. Shilling is the president of A. Gary Shilling & Co., the editor of A. Gary Shilling's Insight and a long-time Forbes magazine columnist. Investors' refusal to accept the chronic low interest rate and investment return climate has spawned distortions as they trade higher risk for return. 12, 2016 A. Gary Shilling's INSIGHT 1 January 12, 2016 The current turmoil in the Chinese economy and financial markets is shaking security markets globally as the yuan nosedived in the first week of this year and Chinese equities lost $1.1 trillion. Updated on 03 August 2020, 4:50 AM Published on 31 July 2020, 10:00 AM Bloomberg Quint The dollar is climbing due to deliberate euro and yen devaluations, declines in commodity currencies along with falling commodity prices, and drops in troubled emerging-market currencies. Commodity prices are down sharply since early 2011, but still have far to go, for a number of reasons: Continuing slow growth in developed countries where the products ultimately made from commodities are bought; excess commodity development in the mid-2000s when fascination over leaping Chinese use of commodities was at its zenith; increasing commodity output even in the face of falling prices; commodities like copper are predominantly produced in developing countries that need the export earnings to service foreign debts—so the lower the commodity price, the more physical copper they must produce to service debts even though that further reduces prices, forcing even more output, etc. Setting aside these distractions, the case for a recession, which may be already underway and spreading globally, is strengthening. There's a lack of the financial exuberance that often foreshadows credit crises. With a sea of global liquidity and Fed caution, it may be some time before the central bank’s campaign of credit-tightening has the usual effect: an equity bear market and recession. Employment gains are mainly in low-paid jobs and slack labor markets fuel immigration fears. Yields could fall further as the recession we believe is underway is recognized and deflation unfolds. So her slowing growth since 2011 is due to sluggishness in North America and Europe, her principal export markets. Major central banks have tried to spur economic growth with, first, zero interest rates, then massive quantitative easing and, finally, negative rates with little success and, indeed, adverse consequences. No part of this website or its subject matter may be reproduced, disseminated, or disclosed without the prior written approval of A. Gary Shilling & Co., Inc. A. Gary Shilling & Co. | 500 Morris Avenue, Springfield, NJ 07081, United States of America. The Federal Reserve finally threw in the towel on its 'unfortunate' 6.5% unemployment rate. The Fed's plan to taper its $85 billion monthly security purchases is difficult since investors are predominantly focused on the central bank's largess, not on the limping economy here and abroad. Slow, slowing and negative growth in major economies will persist for years, until the Age of Deleveraging is over. Consumers win, highly-leveraged producers and financially-weak oil-exporting countries lose. Earlier, Shilling earned his master’s degree and doctorate in economics at Stanford University. is also backing out OPEC oil; other negatives include the completion of globalization and China's waning demand for commodities, the strong dollar, slow global growth and Saudi conflicts with Iran and Russia. Long-Run Outlook: Slow Economic Growth, Low Inflation, Muted Equities, Economic And Investment Outlook Under Biden, The Recession: How Deep, How Long and What Follows. Fears of a government debt bomb that were very prevalent about three years ago have subsided. A Softening Economy But Relative Strength In Housing, Debt And The Dollar Are Sinking Emerging Markets, The New Tax Law: Needed Changes But More Complications. Nevertheless, our review of currency history since ancient times reveals 6 reasons why the buck will probably remain on top. Since we cannot anticipate all the requisites of each individual viewer, there is no consideration given for the specific investment needs, objectives or tolerances of any of the viewers. pursuit of tax dodgers is partly to punish what Obama called "fat cat" Wall Street bankers. A. Gary Shilling was among the few investors to correctly predict a lengthy stagnation in the wake of the financial crisis. A recession in the U.S. and, perhaps, globally may have already started. ...what Biden’s election means for investors. So does the weakness in housing, a consistent leading indicator. Key Words ‘Don’t be fooled!’ A 40% drop could hit by next year after this bear-market rally fades, veteran economist warns Published: May 2, 2020 at 11:22 a.m. This, aided by excess supply of almost everything, has sired falling commodity prices, spreading and deepening deflation and nearly universal devaluations against the U.S. dollar. He is also the author of the monthly newsletter INSIGHT, and the book “The Age of Deleveraging”. Despite generating faster economic growth and more taxable individual incomes and corporate profits, the tax cuts won't pay for themselves and bigger federal deficits and debts lie ahead. Half-speed global growth should persist but downside risks prevail, especially if further oil price collapse or other shocks unfold. Use, duplication, or sale of this service, or data contained herein, is strictly prohibited. This clip touches on several of them in brief. Gary Shilling: Recession Signals Piling Up Recently, others are joining us in forecasting a recession, or at least entertaining a growing probability of one. It will be clear if slow first quarter growth persists. QE in the eurozone, Japan and China will probably be no more efficient than it was in the U.S. But many offsetting factors include youths and seniors entering the workforce, the bottoming of labor participation rates, part-timers taking full-time jobs and mushrooming gig workers. ...the threat of deflation in the U.S. and Europe--and its implications. ...the Fed’s next moves amidst a weak economy. And despite the massive monetary and fiscal stimuli over the past several weeks, excessive debts will constrain consumer and business spending for years. A. Gary Shilling is president of A. Gary Shilling & Co., a New Jersey consultancy, a Registered Investment Advisor and author of “The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation.” Some portfolios he manages invest in currencies and commodities. Twenty years ago, the euro was launched with great hopes for spurring European unit and growth, even rivaling the dollar as a global currency. He estimated the market could plunge between 30% to 40% over the next year as the economic recovery from the coronavirus recession takes longer than expected. The U.S. dollar has declined on balance since 1985, and many believe its days as the dominant international currency are numbered. A. Gary Shilling is an American financial analyst and commentator who appears regularly in publications such as Forbes magazine, The New York Times and The Wal… U.S. consumer sentiment and spending is weakening. Investors are infatuated by central bank largess and virtually unconcerned with weak and weakening economies. Before establishing his own firm in 1978, Dr. Shilling was senior vice president and chief economist of White, Weld & Co. The oil short-covering rally of recent months is probably over, and prices are headed toward our long-held target of $10 to $20 per barrel. The corporate rate cut to 20% is needed in a globalized world with the U.S. rate, now 35%, vs. 12.5% in Ireland. But in the real world, they are buffeted by chronic current-account disequilibria, safe-haven status, currency manipulation, global currency needs, interest rate differences, inflation and deflation, investor zeal for yield, central bank actions, political developments, illogical investor responses, etc. Beyond the recession, consumers should remain stressed. Predicting in this U.S. business expansion is unusually difficult since it varies from past upswings in many ways. You'd expect falling crude oil prices to lead to rising equity values. The end of Fed QE means investors will have to pay greater attention to the economy, meaning they'll be forced to focus on subpar growth in the U.S. with continuing weak labor markets, slowing growth in China, the lack of recovery in Japan and looming recession in Europe. 11/04/2020 - The Roundtable Insight: Gary Shilling and Yra Harris on Bonds, Globalization and Inflation/Deflation But is populism now over? Emerging market stocks and bonds as well as U.S. junk bonds are vulnerable. Our economic forecast for the U.S. through 2016 remains the same as it's been for the past several years. So firms are shifting to corporate inversions—mergers with foreign firms and transfers abroad to lower tax jurisdictions. Commodity currencies are dropping while the yen and euro are deliberately trashed. Some were continuations of past trends, some were new. Gary Shilling talks about the eight important forces he believes point to slow economic growth and low inflation, if not deflation, in the years ahead. Stocks are still "risk on" but vulnerable, so a defensive posture is warranted. Recognized as an effective and dynamic speaker, he often addresses national and international conventions of various business groups, including the Young Presidents Organization. But with rearguard actions by Wall Street, that's taken 44 years. The stock market faces a reckoning when investors come to terms with the coronavirus' long-term economic damage, legendary economist Gary Shilling said. Keeping Greece in the fold will require more bailouts with other weak countries demanding the same. The Fed is torn between reducing quantitative easing and supporting the weak economy burdened by Rather than spend their windfall from lower gas prices on other things, consumers have increased their saving rate. In contrast, whether tiny Greece stays in the eurozone is economically unimportant. Entitlement programs spawn politically-powerful constituencies and are attractive those who grant them, especially when they know they won't be around down the road when the programs' costs might become difficult to sustain. Published Mon, Jul 6 2020 10:37 AM EDT. They don't take into account the depressing effects on compensation of globalization, ample labor supplies, the shift to lower-paid jobs, declining union membership, gig workers and the lack of productivity growth. In today's volatile investment climate, investors' yearning for certainty has drawn them to many investment beliefs. So will intensifying financial strains on energy producers. U.S. corporations pay 25% of total taxes but will get 75% of the tax cuts while individuals pay 47% of the total but will receive only 25%. But they have not accounted for the variety of factors that are restraining wage growth. Obama wants increased minimum wages. Payroll employment growth has picked up but most new jobs are in low-paying sectors. … Shilling made his remarks in a CNBC interview on Monday. All the recent explosive growth in China and shock-and-awe over the world's 2nd largest economy has not propelled her beyond S Curve projections. U.S. consumers may be developing deflationary expectations, to the detriment of economic growth. A Gary Shilling, president,A Gary Shilling & Co "I think we're probably already in a recession." Financial analyst Gary Shilling says the stock market could be set for a big pullback similar to the decline in the 1930s during the Great Depression. With the corona crisis, they're moving in separate directions in what's become a zero-sum game. Many hoped the savings from the nosedive in gasoline prices in December would be spent by U.S. consumers and boost the economy. Debt, especially federal borrowing, continues to worry many. Meanwhile, emerging markets are pressured by slow global growth and export demand, falling currencies, rising interest rates in the US and the resulting flight of crucial foreign capital. Global oil leadership is shifting to American frackers; other production in Russia, Canadian oil sands, etc. Financial analyst Gary Shilling said stocks could be hit with a big decline — similar to the market’s drop during the Great Depression. Filmed on December 4, 2020. The Trump Trade initial reaction to the President's election exemplifies the latter. Jul. Shilling: The Nifty Fifty have a message for the tech obsessed Posted on November 4, 2020 by Danielle Park A. Gary Shilling’s November Insight (subscription only) compares the recent FAANG mania with the Nifty Fifty mania of the 1970s and the last tech mania of the late 1990s. Earlier, most real estate sectors--single-family housing, malls and office buildings--tended to move together, rising in good economic times and falling in bad times. Excesses such as surging leveraged loans and the soon-to-invert yield curve also point to recession. The Fed would like to raise interest rates but will probably remain constrained by choppy labor markets and looming deflation. Plans for fiscal stimuli will likely materialize and aid foreign economies as well, but only after a few years. 6, 2020, 03:30 PM. Eliminating waste could cut health care costs by $548 billion, or 15% of the total $3.6 trillion bill. Besides Forbes, his articles appear in The Wall Street Journal and The New York Times, among others.